This proposal will investigate several aspects of the local and systemic control of thyroid status by the iodothyronine deiodinases, D2 and D3. These enzymes activate thyroxine (T4), (D2), or inactivate T4 and 3, 5, 3' triiodothyronine or T3 (D3, D1). Our studies indicate that D2 plays a critical role in human skeletal muscle. Thus, in Specific Aim 1, we will analyze endogenous D2 in primary cultures of human skeletal muscle and the effect of this on muscle metabolism. Our hypothesis is that an increase in D2 will increase intracellular T3 concentration thus increasing energy expenditure in muscle only, without causing systemic thyrotoxicosis. After confirming that T4 (via D2) will cause the same changes in muscle metabolism as does T3, we will model this system in a new transgenic mouse by expressing D2 exclusively in skeletal muscle under control of doxycycline (TET-ON). This mouse will be characterized with respect to thyroid economy by us and with respect to metabolic parameters in collaboration with Dr. Jason Kim. Given the relevance of this adaptive control of T3 homeostasis mediated by the deiodinases and the recent finding that hedgehog (Hh) proteins regulate D2, in Specific Aim 2 we will test the hypothesis that this is part of a more comprehensive mechanism that includes D3. We will use skin, a well-characterized target of the Hh system, as a model to test this concept. We will analyze the expression of D3 in skin during development, hair follicle morphogenesis, wound healing, and tumorigenesis. We will determine the influence of hedgehog proteins and other locally produced factors on these processes via their effects on D3 and D2. These studies are designed to advance our knowledge of fundamental questions regarding thyroid hormone economy and action. Our findings will be highly relevant for the understanding of and potentially developing new treatments for human obesity, a major health issue in the US, for wound healing, and for primary skin malignancies. They will define factors regulating thyroid status in skin, the largest organ in humans, from the point-of-view of its role in development as a model for the synergistic interactions between hedgehog proteins, growth factors, and thyroid hormones.